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Chapter 10
Fuse Knowledge to Power
A professional career track
Examples
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Chapter 10
Fuse Knowledge to Power
Excerpt from Rethinking
the Corporation
By Robert M. Tomasko
Architects are concerned with flows. When designing a building,
their paramount considerations are how occupants will move in
it and how light and air will circulate around it. Equally important
for organizational architects is how information, know-how, decisions,
and careers will flow in the structure being shaped.
When the work of the corporation was primarily the organizing
of manual labor, markets were local and slow to change, and the
knowledge base upon which competitive success depended was stable,
a unitary hierarchy of manager atop manager made a lot of sense.
The information needed to run the business was limited and could
be easily channeled in one upward or downward flow. Workers did
the work, and managers did the thinking.
But this is a reality that has disappeared from most industries.
Markets are dimensioned globally, rules change faster than some
competitors can master them, and brainpower counts for much more
than brawn. Most organizations, though, remain keyed to the old
realities. Few hierarchies have even kept up with the need to
build in change by linking each of their limited number of levels
with the time horizons of greatest importance to the company.
Wall Street is blamed for American businesses' preoccupation
with the short term, when the problem is just as much a result
of inadequate organization structures.
A more serious problem, though, is the lack of rethinking about
how a business needs to organize its intellectual capital, its
knowledge workers. It is ironic, and wasteful, that while "knowledge
workers" (technical professionals and other holders of college
and graduate degrees) are making up an increasing proportion
of the work force in many industries, the organization structures
in which they work remain more the products of the Industrial
Revolution than of the information age.
Knowledge, especially that which can affect the company's future
competitiveness used to be confined to the research and development
lab or to the strategic planning department. Now, as information
systems-driven service industries assume a larger share of many
economies, knowledge about the capabilities that provide competitive
advantage is much more widely dispersed than was ever necessary
in traditional manufacturing companies. No single information
channel can contain it all. And even traditional product makers
are changing. Fewer manufacturing jobs are directly involved
in making something; more are concerned with planning what to
make, how to make it, and how to keep customers happy after the
product has been purchased. As Saab found in its robot-filled
plant in Trollhattan, the intellectual demands on front-line
workers have increased tremendously. The narrowly skilled assembly
job has been replaced by the more knowledge intensive position
of the factory automation technician.
Requirements for more intellectual value added have escalated
up many organization hierarchies. Networked data bases, expert
systems, and an almost never-ending flow of new personal computer
software have significantly expanded the scope and the nature
of the contribution possible from many mid-level employees. This
is not an unmitigated blessing, though. It has also seriously
polluted the management role in many companies, making many into
high-level doers instead of managers, increasing the role's fragmentations
and making it brittle rather than strong and load-bearing.
This situation will only worsen as economic pressures lead
to increased management delayering. Companies with eight to ten
tiers of management will find it necessary to organize around
four or five. The number of subordinates per manager will have
to sharply increase. Middle managers will find themselves with
less and less time to master these new white-collar productivity
enhancers and to make the intellectual contribution their businesses
increasingly need.
How have industries that have been traditionally knowledge-oriented
organized themselves? Are lessons about the shape of the industrial
hierarchy of the future available from the structures used by
today's think tanks, consulting firms, universities, and hospitals?
Are any practices that have worked well for organizations that
employ primarily professionals, such as accountants, architects,
and lawyers, relevant to other businesses whose future is increasingly
dependent on how they manage the carriers of their intellectual
capital?
A professional track, not a
track for professionals
The parallel hierarchy in which non managerial careers can develop
is called a professional track, mainly to differentiate it from
the narrower idea of the "technical" ladder. The word
"professional" is used here to encompass all individual
contributing knowledge workers, not just members of a select
group in traditional professions.
Ironically, this hierarchy is frequently not the best way
to structure the participation in the work of a company of relatively
self-contained professionals, such as lawyers, physicians, technologists
with strong academic learnings, and even behavioral scientists
and organization development experts. Using the skills of people
in fields such as these can often best be accomplished by treating
them as consultants or contractors, structurally reinforcing
their independence from the corporation (a key element of the
value they add).
Members of many traditional professions argue their work deserves
a measure of autonomy from the corporation because it is self-regulating.
Self-regulation develops when their role has become institutionalized
in society and is associated with:
- A defined knowledge base and a series of routines specifying
when to apply what portion of it
-Some formal mechanism for regulating entry to the profession
through an accreditation or certification process
- A standard of ethics or code of conduct and the existence
of an external body to enforce them
- A professional culture that stresses a duty to use the profession
to better society-a sense of mission or calling.
Characteristics like these distinguish professions from other
vocations. They are useful qualities, but they can also pose
problems for some corporations. To the extent that they build
a wall between professionals and others in a company, they can
be counterproductive. Many professionals, though, are comfortable
with this wall; its existence is incorporated into their routines
of practice. Professionals tend to have clients or patients they
serve, rather than teammates and colleagues. Traditional professionalism
often leads to the creation of hierarchies of expertise, which,
observes Abraham Zaleznik, "tend to fragment rather than
bond people's relationships."
This sense of apartness had led professionals to play ambivalent
roles in many organizations. Mutual suspicions and concerns about
trust abound between them and their managers. Some professionals
are seen as being much more concerned with their standing in
their field than with their position in the company. Resentments
form as some outside the professional's field see the person
trying to achieve a disproportionate degree of autonomy by hiding
behind a professional mystique.
These problems, once just minor annoyances, will become much
more troublesome as the proportion of knowledge workers and employees
with at least quasi-professional leanings increase in corporate
work forces. Such workers' know-how cannot be purchased exclusively
on the open market. But the difficulties associated with internalizing
it can quickly torpedo the success of a parallel hierarchy if
they are not taken into account as the new structure is implemented.
Avoiding these difficulties requires that a bargain be struck
between
the corporation and its knowledge workers. The company must recruit
knowledge workers who find it attractive to give up a measure
of their professional autonomy in exchange for a mechanism that
ensures they have more influence over the direction of the business.
Providing that mechanism is a key function of the professional
track that reaches to the company's most senior management levels.
Companies will also have to apply some creativity to make the
rewards and recognition provided internally at least as compelling
as those provided by the outside profession. Microsoft does this
by designating promotion to one level of computer programmer
as equivalent to making partner in a law firm. A big ceremony,
with attendant hoopla in and outside the company, is provided
for those reaching this stage. The objective is to have the employee
s tie to the company become slightly stronger than the tie to
the field or discipline. A key to achieving this is the provision
of incentives that encourage and reward interdisciplinary thinking
and a willingness to change one's perspective, not just hunker
down in it.
Examples of the Professional
Track in Practice
While few companies have fully developed systems that allow non
managers to play a significant part in corporate decision making,
steps in this direction are becoming more common. Kodak has used
senior individual contributors to help fill in the "white
space" between product lines. Corning Glass Works has redesigned
jobs for its older managers so that they can specialize in adapting
existing products to meet emerging customer needs, rather than
just focusing on the narrowing competition for senior executive
positions. Both 3M and Ford have broadened their technical advancement
ladders to include manufacturing and sales professionals.
A fast-food operator created a position called "senior technical
advisor" and gave it status equivalent to that of its vice-president
for operations. The advisor's role: to serve as a high-level
troubleshooter to work one-on-one with franchisees. This job
is given to some of the company's best field-oriented talent,
people who might otherwise wilt on the vine if moved to headquarters.
This is not an idea limited only to the United States. One of
the most innovatively organized companies anywhere. Brazil's
Semco S.A., pays its professionals according to their contributions,
rather than on the basis of their location in its minimally layered
management hierarchy. It is common for Semco's "associates"
to earn considerably higher salaries than their managers or even
senior executives.
Practices like this will become more common as companies world-wide
become aware of how dependent their future competitiveness is
upon the creation of structures to accommodate the contributions
of their knowledge workers. Their recruiting literature will
declare, "You don't have to become a manager to get ahead
here." In a business world where, increasingly, knowledge
and information equate with power, those who possess these attributes
need to join those who occupy the corporation's most powerful
positions.
© Robert M. Tomasko 2002
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